Kellogg's sells US cookie and cracker brands

Keebler and Famous Amos have been sold to the Ferrero Group by Kellogg's

The Kellogg Company (Kellogg's) has sold US cookie and cracker brands Keebler and Famous Amos to Italy’s Ferrero Group, enabling it to focus on its core breakfast cereals and savoury snacks offer.

The company has two UK plants, in Wrexham and Manchester, which both concentrate on producing breakfast cereals.

Under the $1.3bn (£990m) all-cash deal, which is expected to close by the end of July, the Italian chocolate manufacturer will acquire selected Kellogg’s cookies, fruit and fruit-flavoured snacks, pie crusts and ice cream cone businesses.

The move would enable Michigan-based Kellogg’s to focus on its breakfast cereals and savoury snacks offer.

‘Better growth’​

“This divestiture is yet another action we have taken to reshape and focus our portfolio, which will lead to reduced complexity, more targeted investment, and better growth,"​ said Steve Cahillane, Kellogg's chairman and CEO.

“Divesting these great brands wasn’t an easy decision, but we are pleased that they are transitioning to an outstanding company with a portfolio in which they will receive the focus and resources to grow.” ​

The transaction also includes Mother’s, Murray’s, and Murray’s Sugar Free brands. Ferrero will also acquire six US food manufacturing facilities in Allyn, Washington; Augusta, Georgia; Florence and Louisville Kentucky; and two plants in Chicago, Illinois. It will also take on a leased manufacturing facility in Baltimore, Maryland.

Kellogg’s said the businesses being sold had recorded net sales of nearly $900m and operating profit of approximately $75m in 2018.

‘Excellent strategic fit’​

Giovanni Ferrero, executive chairman of the Ferrero Group, described the businesses as an “excellent strategic fit”​ as it continued to increase its “overall footprint and product offerings in the North American market”.​

Lapo Civiletti, chief executive of the Ferrero Group, added: “We are acquiring a portfolio of well-established brands that consumers love, with very strong market positions across their respective categories, allowing us to significantly diversify our portfolio and capitalise on exciting new growth opportunities in the world’s largest cookies market​.”​

Kellogg’s will retain the rest of its North American snacking businesses, including its crackers, salty snacks, wholesome snacks, and toaster pastries brands.